Array Digital Infrastructure (AD) Q4 2024 earnings summary

Executive summary

• 2024 was a transformative year with major portfolio optimization, including the sale of wireless operations and spectrum assets to T-Mobile, Verizon, AT&T, Nsight Spectrum, and Nex-Tech Wireless, monetizing 70% of spectrum holdings as of 12/31/24.

• Significant investments were made in 5G mid-band deployment and fiber expansion, increasing the fiber footprint by nearly 30% over three years.

• Both businesses maintained cost reduction programs, expanded margins, and increased adjusted EBITDA by 7% year-over-year on a consolidated basis.

• 2025 priorities include closing the T-Mobile transaction, investing in fiber expansion, and optimizing post-transaction capital structure.

• Excluding a $136 million license impairment, full-year adjusted net income was $63 million, up from $54 million in 2023.

Financial highlights

• Consolidated capital expenditures were down 24% for the full year, contributing to increased free cash flow.

• UScellular's free cash flow in 2024 was $280 million, up $88 million from 2023, driven by profitability improvements, lower capex, and higher distributions from equity investments.

• TDS Telecom achieved a 23% increase in adjusted EBITDA and 3% growth in total operating revenues for the full year, with residential revenues up 6%.

• UScellular's adjusted EBITDA for 2024 was $1,018 million, up 3% year-over-year.

• Q4 and full-year 2024 revenues declined 3% year-over-year, with a net loss for the year driven by a $136 million license impairment.

Outlook and guidance

• TDS Telecom forecasts 2025 revenues of $1.03–$1.07 billion and adjusted EBITDA of $320–$360 million, with capital expenditures expected to rise to $375–$425 million, primarily for Enhanced A-CAM fiber expansion.

• UScellular is not issuing 2025 guidance due to pending transaction uncertainties but expects to close the T-Mobile deal by mid-2025.

• TDS Telecom targets 150,000 new fiber service addresses in 2025 and aims for 1.8 million marketable fiber addresses long-term.